China rejects accusation of ‘exporting inflation’
Chinese enterprises are helping to ease global inflation by raising production efficiency, the country’s top economic planner said in a press statement.
The National Development and Reform Commission (NDRC) refuted foreign reports which said China was exporting inflation reflected in its repeated rises in the consumer price index.
The report said price rises in the manufacturing sector, where most of the country’s exports came from, were moderate despite rapid general increases. However, it gave no figures.
Meanwhile, the overall profitability of Chinese enterprises was stable and their profit ratio was estimated to be 6.4 percent this year, up 0.3 percentage point from the previous year.
This meant Chinese enterprises were not pushing inflationary pressures on to foreign consumers, but striving to offset the impact of raw material price hikes by raising production efficiency, which in turn helped to suppress global commodity prices.
The report cited World Bank figures that showed the margins of manufacturing enterprises increased despite sustained rises in wages and bulk commodities prices.
A survey carried out in September by the People’s Bank of China, the central bank, showed the technological capacity of Chinese enterprises was relatively low compared with foreign counterparts and companies still had potential to raise efficiency.
China’s production efficiency had a huge impact on prices of its major export destinations such as the United State and Europe. The price index of China’s exports to the US had increased 2.2 percent over the same period last year. The growth rate was still lower than the increase in the overall price index of US imports, said the Wall Street Journal on November 14.
This indicated that China was not the primary driving force of price rises in the United States.
Market observers said Chinese exports would continue to help curb inflation in the developed countries for "a period".
They were echoed by European Central Bank President Jean-Claude Trichet who said China’s inflationary pressures were unlikely to spread to Europe.
In late November, Trichet said China’s commodities were much cheaper those made in Europe and their market share was growing. In view of these facts, Chinese commodities would help reduce import prices in euro areas.